UK Inflation Increases Unexpectedly In March

UK inflation increased unexpectedly in March for the first time in six months, driven by prices for food, clothing, culture and recreation.

According to the Office for National Statistics, consumer prices rose 3.5 percent from the previous year, and 0.3 percent from February.

Core annual inflation, which excludes alcohol, food, tobacco and energy prices, grew to 2.5 percent from 2.4 percent. Retail-price inflation, a measure used in wage negotiations, slowed to 3.6 percent from 3.7 percent.

The Bank of England said in February that it expects inflation to slow to a 2 percent goal by the year-end.

However, some economist indicate that jump in energy prices may push the inflation rate into its third year above target.

Inflation is also proving a concern for euro zone policy makers. The European Central Bank held its benchmark interest rate at 1 percent in April and warned about a near-term “upside” price risks, associated with it.

Source: Bloomberg

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Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.